Thursday, 21 June 2012

That Didn't Take Long

Canada’s dairy, poultry markets prized in Pacific trade deal

byBARRIE McKENNA and BILL CURRY OTTAWA

June 21, 2012

The United States, Australia and New Zealand are demanding unfettered
access to Canada’s highly protected dairy and poultry markets a day
after inviting Ottawa to join them in the Trans-Pacific Partnership free
trade talks.

Their demands to tear down agricultural trade barriers mean
Canada’s supply management system will be in the cross hairs in the TPP
talks.
“For Australia, it’s about market access. We have farmers
who are very keen – as does New Zealand – to have access, to have the
removal of barriers and tariffs,” Louise Hand, Australia’s High
Commissioner to Canada, said in an interview on Wednesday. “I guess
Australia, like the others, needed to be assured that that was where
Canada was coming from.”
The U.S. dairy industry is similarly
salivating at the prospect of securing access to the closed Canadian
market – which sustains nearly 15,000 farmers and keeps prices
artificially high.
“All Canadian trade barriers against U.S. dairy
products must be eliminated,” the U.S. Dairy Export Council and the
National Milk Producers Federation said in a statement as they backed
Canada’s bid for entry as a way to re-open the issue.
The powerful
dairy industry quickly served notice to the Obama administration that
it won’t back any TPP pact without “full market access for U.S. dairy
products in the Canadian market,” said Tom Suber, president of the U.S.
Dairy Export Council. Canada’s dairy and chicken farmers are equally
determined to preserve the tariff wall and controls on production that
shelter the industry from global competition.
The supply
management system also requires Canadian consumers to pay an extra
$3-billion a year for milk, cheese, eggs and chicken.
But Canada
has quietly suggested to TPP countries that any concessions it makes on
supply management in the Canada-European Union trade negotiations could
become a model for its offer to the other TPP countries, which include
the United States, New Zealand, Australia, Malaysia, Singapore, Vietnam,
Brunei, Chile and Peru. Mexico, like Canada, was invited to join this
week.
While Ottawa has been tight lipped on the details, Matthias
Brinkman, the EU’s ambassador to Canada, briefed reporters in April on
the negotiations. Rather than abandoning supply management, he said,
both sides are aiming to adjust quotas, with a quid pro quo for certain
products, such as allowing more European cheese imports in exchange for
increased beef exports.
Canadian tariffs on dairy products, which
are up to 315 per cent, could be cut by 30-50 per cent and still be
“prohibitive,” Mr. Curtis pointed out.
Trade Minister Ed Fast told
The Globe in an interview on Wednesday that Canada made no specific
commitments to get into the talks, nor has it ruled anything out.
“We’ve
made two things very clear: We’re prepared to discuss all issues at the
negotiating table,” he said. “And we’ve also made commitments to our
farmers. In all of our previous trade negotiations, right from NAFTA on,
we’ve been able to satisfactorily resolve these issues and come up with
trade agreements that really serve the interests of both sides.”
Australia,
New Zealand and the United States were the last three of the nine
original TPP members to approve Canada’s entry to the talks. The TPP
members were aiming to conclude an agreement this year, but that appears
optimistic now.
“Our farmers don’t want barriers on any sector,
but this is obviously a negotiation,” Ms. Hand said. The “starting
point” is that Canada is committed to “an ambitious outcome” that
includes “the elimination of barriers to trade in goods and services,”
she added.
Trade experts, and even other TPP countries,
acknowledge that Canada’s protectionist supply management system is
unlikely to disappear overnight.
But to get to the TPP table,
Prime Minister Stephen Harper has put supply management in play. And
that will almost certainly mean significant concessions, including
allowing more foreign products into a system keeps virtually all imports
out.
“Tariff and subsidy elimination means dairy farmers in both
Canada and the U.S. will have to face genuine world signals, which
neither of them do now,” insisted an official of one TPP country, who
declined to be named.
The pressure is not just from abroad.
Canadian food makers such as McCain Foods Ltd. and Saputo Inc. want to
sell to the Asian market, but can’t buy dairy ingredients here at
competitive prices.
“I suspect there will be the beginning of
movement on the supply management question – not just because of foreign
pressure, but because our own processors are finding it too expensive
to manufacture food,” said John Curtis, the former chief economist at
the Department of Foreign Affairs and International Trade and now an
adjunct professor at Queen’s University. “That’s where the real economic
pressures are.”
Other experts say Ottawa should be much more
ambitious at the talks, and in other trade negotiations. In an upcoming
C.D. Howe Institute paper, former Canadian trade negotiator Michael Hart
urges Ottawa to phase out supply management unilaterally over 10 years.
“It’s
time to be a little braver,” said Mr. Hart, a professor at Carleton
University’s Norman Patterson School of International Affairs. “Mr.
Harper wants Canada to be a trading nation. Okay, Mr. Harper: just do
it.”

Trade talks ain’t what they used to be (open)

Once upon a time, major international trade pacts were the source of controversy and great debate in Canada.

The North American Free Trade Agreement ignited a national
uprising. On Parliament Hill, opposition parties railed against the
accord’s potential to make Canada the 51st state of the U.S. It made
national figures out of anti-NAFTA crusaders Mel Hurtig and Maude
Barlow.Those were the days.
For a few years now, Canada has
been negotiating a free-trade agreement with Europe that is absolutely
massive in scope. Ultimately, it could affect everything from health
care to the environment. Yet, while the Council of Canadians and a few
other groups have been sounding the alarm on the impact this deal could
have on the country, theirs have been mostly voices in the wilderness.
Trade
talks with the EU have gained little traction nationally. It would seem
Canadians will learn what we’ve been signed up for once the deal is
announced.
Which brings us to this week’s news that Canada has
been allowed provisional entry into the Trans-Pacific Partnership (TPP)
negotiations – a trade deal much bigger in scale than NAFTA. Along with
the United States, Mexico and eight other Pacific countries, the
economic partnership would cover a region of 658-million people with a
combined GDP of more than $20-trillion. You’ll be hearing those figures a
lot in coming months.
And that may be about all.
In fact,
negotiations have been going on for more than two years. Canada and
Mexico are late entrants. Until now, there has been little information
released about what the talks entail. Secrecy has been the trademark of
the discussions and will no doubt continue to be.
There has,
however, been one leak: a chapter of the proposed agreement involving
investment. The Washington, D.C.-based watchdog group Public Citizen has
been able to verify the text as authentic.
Noteworthy in the
draft is the concern that the negotiations are occurring without any
oversight by the media or elected officials. This takes on a more
troubling hue when you consider that the document indicates negotiators
have already agreed on some fairly controversial measures, in particular
ones around the rights and privileges of foreign corporations.
According
to Public Citizen, the trade deal would limit the extent to which
signatory countries could regulate foreign firms operating within their
boundaries, effectively giving them greater freedoms than domestic
firms.
It also reveals that all of the countries except Australia
have agreed to terms around the operation of foreign tribunals, which
would arbitrate disputes. The tribunals would be staffed by
private-sector lawyers who would rotate between acting as judges and
acting as advocates for the investors who might be suing a particular
government over a TPP-related matter. Talk about a potential conflict of
interest.
And these are just a few of the more contentious issues
discussed in the leaked draft. There are others. Lots of them. And
remember, this is just one chapter of what we can only assume are
several.
Of course, this doesn’t make any proposed deal bad.
There’s little question that such a pact has tremendous upside for
Canada. If Japan joins the negotiations – and China and India down the
road – the potential of this Pacific partnership becomes even greater.
But
the clandestine nature of the talks is concerning. As are reports that
Canada and Mexico – as part of the terms of their prospective entry into
the club this week – were told they could not reopen any parts of the
deal that had already been agreed upon by the original nine member
countries. And that we might have abided to that stipulation without
even seeing the existing draft document. (Although that seems beyond
belief.)
Prime Minister Stephen Harper says Canada has not agreed
to any specific measures. But we can only guess what that means. Just as
we can only guess what such a trade agreement would ultimately do to
the business life of this country and everything that flows from it.
Back in the day, the thought of that would have caused a real commotion in this country. Maybe no longer.

About Me

I've done little planning, but been extraordinarily lucky. New opportunities seem to appear when I got bored, or my boss got tired of me. After teaching at high school and university, and market gardening when I went "back to the land", I spent 30 years working for the CBC, most of it when CBC had the resources to do things that mattered, not the media sweatshop its become now. Again, I was the lucky one.